Con: Loss of control over the funds or property; possibly
“inadequate” (?) resources to enable the donor to pay expenses in later life
(e.g., expenses of one’s “last illness”); & concern about the potential
behavior of donee.

Choosing the Gift Property p.2

Strategies in picking the potential gift property:

1) High tax basis property (including cash).

2) High appreciation potential property

(including when property to be transferred is currently
depreciated in value).

See Reg. §25.2511-2(c) (p.18) - an incomplete gift results
when the donor has power to change interests among the beneficiaries in the
trust.

Cf., Reg. §25.2511-2(d) where donor’s retention of only a
right to determine time when a specific beneficiary is to receive from trust. Cf.,
Lober.

Transfers into a Trust & Gift Completion Issues

PLR 201628010 (p.18) - Distribution Committee

Written consent of Grantor is necessary to

distribute to the grantor, but (2) no consent essential to
distribute to others, and (3) distribution of principal subject to standard as
grantor directs.

Holding: (1) No ruling re §671 (fact question); (2) Gift
is incomplete for gift tax purposes; (3) Distribution not a gift by the
Committee members

Gift Transfers to a Grantor Trust (IDGT) p.25

Gift completion for gift tax but not for income tax. Three
options re Grantor’s income tax:

(1) No reimbursement; (2) Required reimburse; (3)
Discretionary reimbursement by Trustee. Rev. Rul. 2004-64 (p.26) – (1)
holding payment of income tax by the grantor is not a gift to the trust. (2)
inclusion in the gross estate (under Code §2036(a)) if grantor retains the
right to be reimbursed by the trust (Situation 2 in ruling). (3) no gift by
donor & no §2036 in Situation 3 (assuming no understanding).

Notice 2010-19
p.29

IRC §2511(c) provides that a transfer in trust is treated as
a gift transfer unless the trust is treated as wholly owned by donor under Subpart
E.